Evaly owes merchants Tk206cr, doesn’t say how it will pay back

Embattled e-commerce platform Evaly has told the commerce ministry that it owes merchants Tk206 crore, which is "normal and acceptable".

In an explanation submitted to the ministry recently, Evaly Managing Director Mohammad Rassel, however, neither mentioned the number of merchants it owes the amount, nor how long it would take for the company to clear the payments.

On the Tk311 crore customer liabilities, Evaly told the ministry that it would be able to clear those in the next five months if it can continue the regular business, plus it gets desired investments in the upcoming days.

Mohammad Rassel declined to comment on merchant payments and Evaly's plan on clearing pending customer orders if the platform does not get any new investment.

In July, Mohammad Rassel took to his social media handle to announce an investment in Evaly of Tk1,000 crore from Jamuna Group. But Jamuna Group Director Monika Islam told The Business Standard last week that they were yet to finalise any investment.

Commerce Secretary Tapan Kanti Ghosh told TBS that they will hold an inter-ministerial meeting soon to decide the next course of action about Evaly.

Md Hafizur Rahman, chief of commerce ministry's Central Digital Commerce Cell and also an additional secretary, said, "The government will prioritise the interest of the customers and merchants while they map out the next step."

Do premium rates justify merchant debts?

Evaly told the commerce ministry that since it does business with manufacturers and importers directly and the merchants register a minimum 15%-20% profit on an average, Tk206 crore debts to them is "very normal and acceptable".

"The merchants benefited from easy businesses with Evaly during the tough time of the coronavirus pandemic. Typical businesses require stocking, display, marketing and face-to-face sales involving a higher operating cost as selling products to Evaly offers more profits with less spending," said Mohammad Rassel.

Sector people said most of the merchants stopped supplying Evaly on credit since June as the company had not been clearing the dues to merchants although the company sold products to customers while receiving the payments in advance. The supply suspension led to delivery delays to customers who placed orders during the T10 campaign.

There have been allegations too that many customers did not receive their products even after one and a half months despite a mandatory 10-day delivery deadline set by the commerce ministry.

Mohammad Rassel told TBS last week that purchases in cash from the merchants have resulted in "delivery delay in some cases".

"This is normal. The supplier would be in a fragile confidence until new investments hit Evaly. I hope it will normalise soon," he noted.

FB post offering sale of Evaly cheques

Evaly has not been paying its staffers since June this year and reportedly putting pressure on them to quit the job.

According to the e-commerce platform's own assessment, Evaly's total assets amount to Tk121 crore as the total liability – merchant debts and customer liabilities – is Tk544 crore.

In other words, it is not possible to clear the liabilities even if the company is now sold.

The e-commerce platform failed to deliver orders placed after January this year. Refund cheques also bounce as Evaly does not have enough balance to its bank account.

There were many facebook posts offering sales of such refund cheques at a discounted rate.

Commerce ministry official Md Hafizur Rahman said Evaly could have laundered money as several government agencies are looking into the e-commerce irregularities.

'Impossible to clear old orders without new investment'

The people concerned think it is almost impossible for Evaly to avail a big investment or meet liabilities from profits it gets through business.

In this situation, the ministry has decided to hold an inter-ministerial meeting this week to take the next course of action to protect the interests of buyers and merchants.

Mohammad Rassel had a meeting through social media last week with the admins of different groups of Evaly buyers. He requested buyers to refrain from posting negative posts and comments against Evaly on social media at this time as he was trying to get new investors.

"I am giving information on the number of Evaly's site visitors on Facebook to attract investors. It is not possible to clear old orders without new investment," he told buyers.